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3232LNG a Focus of Recent Executive Orderhttps://www.pipelinelaw.com/2019/05/29/lng-a-focus-of-recent-executive-order/
Wed, 29 May 2019 16:15:32 +0000https://www.pipelinelaw.com/?p=2719The Trump Administration’s recent executive order signals potentially significant changes to the regulatory landscape for domestic energy infrastructure generally and LNG in particular. Among the notable features of the order are the provisions directing US DOT to (1) update its 49 C.F.R. Part 193 regulations for LNG facility safety; and (2) issue regulations allowing LNG to be transported in approved rail tank cars.

Continue Reading]]>The Trump administration’s recent executive order, Promoting Energy Infrastructure and Economic Growth (April 10, 2019), signals potentially significant changes to the regulatory landscape for domestic energy infrastructure generally and LNG in particular. Among the notable features of the order (in addition to directives to EPA regarding Clean Water Act water quality certifications) are the provisions directing US DOT to (1) update its 49 C.F.R. Part 193 regulations for LNG facility safety and (2) issue regulations allowing LNG to be transported in approved rail tank cars. The order sets an ambitious deadline for these actions, requiring both to be completed by May 10, 2020.

Updates to LNG Safety Regulations

Part 193 LNG safety regulations govern the siting, design, installation or construction of LNG facilities, and they are largely based upon National Fire Protection Association Standard 59A (NFPA 59A), a consensus industry standard that is incorporated into Part 193 by reference. The order notes that current Part 193 regulations for LNG facilities “apply uniformly to small-scale peakshaving, satellite, temporary, and mobile facilities, as well as to large-scale import and export terminals.” Indeed, the Part 193 regulations were originally issued nearly 40 years ago—and have not been revised significantly since then to respond to the market shifts and innovations that have led to increasing interest in the development of large-scale LNG facilities.

In updating Part 193, the order directs DOT to use risk-based standards “to the maximum extent practicable.” This is consistent with DOT’s regulatory approach in other areas of transportation safety, such as its pipeline regulations in 49 C.F.R. Parts 190-195. While it is generally expected that DOT’s Part 193 efforts will focus on the incorporation of more a recent edition of NFPA 59A and potentially refine the exclusion zone approach in the Part 193 siting regulations, it remains to be seen whether DOT will take the opportunity to address a rulemaking mandate for small-scale LNG facilities that Congress included in the 2016 reauthorization of the Pipeline Safety Act. See S. 2276 (114th), PIPES Act of 2016 at Sec. 27(b) (requiring the Secretary of Transportation to “review and update the minimum safety standards prescribed pursuant to [49 U.S.C. 60103] for permanent, “small-scale liquefied natural gas pipeline facilities,” a term that is undefined in the statute or PHMSA regulations).

LNG Transport in Rail Tank Cars

The order also directs DOT to propose and finalize a rule permitting LNG to be transported in approved rail tank cars. This directive likely derived from a petition for rulemaking submitted to DOT in January 2017 by the Association of American Railroads (AAR) requesting a rule authorizing the transport of LNG by rail in DOT-113 tank cars. As AAR noted in its 2017 petition, “LNG is similar in all relevant properties to other hazardous materials that are currently authorized to be transported by rail.” The omission of LNG from DOT’s hazardous materials transportation regulations is thus likely a product of the fact that there has not previously been significant interest in LNG rail transport. DOT has apparently undertaken preliminary safety and economic reviews but has not yet published an ANPRM or any other documents in furtherance of the rulemaking. DOT’s most recent significant rulemakings report projects July 29, 2019, as the proposed rule publication date and September 27, 2019, as the end of the comment period on the proposed rule.

Continue Reading]]>The Department of Transportation’s Office of Inspector General (OIG) released a report criticizing PHMSA’s implementation of Congressional mandates and recommendations from the NTSB, GAO and the OIG itself. The OIG’s findings paint a troubling picture of an unsophisticated agency. OIG highlights in particular the lack of sufficient procedures to track rulemakings and coordinate within various departments within the agency and with other intermodal agencies, resulting in delayed rulemakings and implementation of recommendations. While PHMSA has already been implementing organizational changes, the OIG notes that it is too soon to determine whether they will adequately address the Agency’s ability to meet mandates and recommendations in full and in time.

While criticism of PHMSA’s timeliness in implementing statutory requirements is not new, Representative DeFazio requested this OIG audit due to concern about PHMSA’s delay in establishing rail car regulations and implementing mandates from the 2011 Pipeline Safety Act reauthorization. The OIG review confirmed that since 2005, PHMSA has only implemented approximately two-thirds of Congressional mandates and NTSB, GAO and OIG recommendations. Twenty-five percent of PHMSA’s statutory mandates remain unimplemented, including 8 pipeline safety rulemaking mandates from the 2011 reauthorization. Further, the Agency has missed nearly 70% of its mandated deadlines.

As to the underlying cause of the delays, the OIG found that PHMSA has not developed sufficient agency-wide processes or provided guidance to its program offices on implementing mandates and recommendations. Although PHMSA was created in 2004, its predecessor agencies date back to the 1970s and only recently did PHMSA’s Office of Hazardous Materials Safety and the Office of Pipeline Safety prepare internal rulemaking procedures (in 2012 for hazardous materials and 2015 for pipeline safety). Despite those new procedures, the OIG disparagingly notes that the procedures do not require participation of Chief Counsel staff in the development of regulations, although approval is required before rules are endorsed by the PHMSA Administrator. By way of example, PHMSA staff spent 13 months drafting the nearly 400 page natural gas proposed rulemaking before requesting input from the Chief Counsel’s office, and it then took another 9 months to exchange comments and conduct meetings before that office concurred with the draft.

In addition, the OIG found that PHMSA does not have requirements or procedures in place for the Chief Safety Officer’s staff to provide quality assurance reviews of regulatory analyses (although mandated by a 2010 DOT Order) and even when input is provided, it is not always incorporated. Upon review of specific mandates and recommendations, OIG explained that PHMSA’s recent procedures on rulemaking were rarely implemented, including basic requirements such as developing a plan, identifying roles and responsibilities, and creating timetables. Despite its procedures, OIG observed that PHMSA has no established process for oversight of implementation of mandates and recommendations and no internal reporting or tracking processes, and that the Administrator is provided with only verbal briefings, none of which are documented.

To address these shortcomings, OIG recommends that PHMSA develop and implement the following five (5) measures:

Agency-wide policy for implementing mandates and recommendations (including minimum requirements such as roles and responsibilities, plan for addressing every mandate/recommendation, assigning team member responsibilities, and retaining documentation per DOT records management policy);

Rulemaking prioritization process that includes assessment of risk;

Written agreements with other DOT operating administrations, including FAA, FMCSA, and FRA for coordination on rulemaking, among other things;

Guidance to Office of Hazardous Materials Safety on implementing written agreements with other operating administrations; and

Internal policy on dispute resolution process that includes criteria and timeframes.

In response, PHMSA agreed with the majority of the OIG findings, noting that they are consistent with the Agency’s own internal review conducted earlier this year. PHMSA has set a timetable for implementation, with several recommendations to be completed by the end of this year and all of them by the end of March 2017. Further, the Agency detailed efforts that are currently underway to improve its response to mandates and recommendations, including new administrative positions, a new Office of Planning and Analytics, revised or new procedures, and a Regulatory Steering Committee.

The reality nevertheless remains that PHMSA continues to be understaffed and underfunded with an expanding regulated oil and gas pipeline network and a growing task list, including these recent OIG recommendations as well as mandates from the 2016 Pipeline Safety Act reauthorization. As the Agency rushes to meet these demands without adequate procedures and oversight in place, the findings in this report suggest that the quality of PHMSA’s rulemakings and studies, including its recent reliance on the issuance of interim final rules instead of proposed rules, should be questioned. Similarly, PHMSA’s procedures, oversight, and coordination in other areas such as accident investigations and enforcement may also be subject to additional scrutiny.

]]>Emergency Approval Issued by DOThttps://www.pipelinelaw.com/2015/12/23/emergency-approval-issued-by-dot/
Wed, 23 Dec 2015 20:12:32 +0000http://www.pipelinelaw.com/?p=1533At an emergency press conference held today by the United States Department of Transportation (DOT), Secretary of Transportation Anthony Foxx announced that DOT has issued a one-time approval for special operating authority to engage in air transportation to specified markets. The approval will be limited in duration, valid only from the evening of December 24...

Continue Reading]]>At an emergency press conference held today by the United States Department of Transportation (DOT), Secretary of Transportation Anthony Foxx announced that DOT has issued a one-time approval for special operating authority to engage in air transportation to specified markets. The approval will be limited in duration, valid only from the evening of December 24 until early morning on December 25, 2015. In granting this authority, DOT has approved one-time use of a specially powered aircraft, which the Federal Aviation Administration (FAA) has approved for nighttime operations.

]]>Environmental Group Threatens To Sue U.S. Department of Transportation Over Spill Response Planshttps://www.pipelinelaw.com/2015/08/12/environmental-group-threatens-sue-u-s-department-transportation-spill-response-plans/
Wed, 12 Aug 2015 19:52:29 +0000https://www.pipelinelaw.com/?p=1478On July 28, 2015, the National Wildlife Federation (NWF) informed the U.S. Department of Transportation (DOT) of its intent to sue for violations of the Clean Water Act (CWA) § 311(j) and Executive Order 12777 (which guides federal implementation of the Oil Pollution Act of 1990).

Continue Reading]]>On July 28, 2015, the National Wildlife Federation (NWF) informed the U.S. Department of Transportation (DOT) of its intent to sue for violations of the Clean Water Act (CWA) § 311(j) and Executive Order 12777 (which guides federal implementation of the Oil Pollution Act of 1990). Specifically, NWF alleges that DOT has for over 20 years failed to issue regulations requiring an owner or operator of an offshore facility landward of the coast line to prepare and submit a facility response plan (FRP) applicable to discharges of oil or hazardous substances to waters of the United States. NWF Notice of Intent Letter, at 1. According to NWF, issuing such regulations is a non-discretionary duty under the CWA.

DOT regulations at 49 C.F.R. Part 194 require FRPs for onshore facilities, and the U.S. Department of Interior, Bureau of Safety and Environmental Enforcement regulations at 30 C.F.R. Part 254 require FRPs for offshore facilities, meaning “the area seaward of the line of ordinary low water along that portion of the coast which is in direct contact with the open sea and the area seaward of the line marking the limit of inland waters.” 58 Fed. Reg. 7489, 7490 (Feb. 8, 1993).

NWF argues that DOT has not authorized PHMSA to review or approve FRPs for offshore pipelines landward of the coastline located in waters of the United States, nor to issue regulations requiring owners or operators of such pipelines to prepare and submit FRPs. NWF alleges that this creates a gap in the federal regulatory requirements associated with FRPs. As an example, NWF points to the fact that DOT has not required and has not approved FRPs for lines such as sections of an Enbridge offshore pipeline (“Line 5”) located under the Straits of Mackinac, the St. Clair River, and other inland navigable waters. Apparently, Enbridge prepared and submitted FRPs for these sections of Line 5 to PHMSA, but the Agency declined to approve them, as it has not been authorized by DOT to review or approve FRPs for offshore pipelines landward of the coastline. NWF argues that DOT must establish a regulatory requirement for owners or operators of such lines to prepare, submit, and obtain approval of an FRP and that if DOT fails to do so, it is in violation of CWA § 311(j)(5)(A)(i).

The focus of the letter and NWF’s potential suit is on inland waters that are jurisdictional under the CWA, which highlights the importance of the U.S. EPA and Army Corps of Engineers’ May 27, 2015 final rule defining “waters of the United States.” NWF has threatened to sue DOT within sixty days if it does not issue the regulations that NWF alleges are required. This would be the second lawsuit brought against DOT and its sub-agencies in the last few years concerning FRPs. PHMSA was sued in 2013 by a watchdog group, Public Employees for Environmental Responsibility (PEER), over the Agency’s failure to produce copies of operators’ FRPs (and related records) that the group had requested under the Freedom of Information Act (FOIA). The suit is still pending, with PHMSA filing regular status reports informing the court of its progress in producing the requested records.

]]>New Emergency Order and Safety Advisory Affecting Crude Shipments by Railhttps://www.pipelinelaw.com/2014/05/20/new-emergency-order-safety-advisory-affecting-crude-shipments-rail/
Tue, 20 May 2014 13:28:51 +0000http://www.pipelinelaw.com/?p=1193The DOT has issued an Emergency Order requiring that railroads operating trains carrying more than 1,000,000 gallons of Bakken crude oil (approximately 35 tank cars) in a particular state must notify the State Emergency Response Commission (SERC) of the expected movement of such trains through the counties in that state.

Continue Reading]]>The DOT has issued an Emergency Order requiring that railroads operating trains carrying more than 1,000,000 gallons of Bakken crude oil (approximately 35 tank cars) in a particular state must notify the State Emergency Response Commission (SERC) of the expected movement of such trains through the counties in that state. The notification must: (1) provide an estimate of the number and frequency of trains affected by the Order; (2) identify the oil being transported; (3) provide applicable emergency response information required under 49 C.F.R. Part 172; (4) identify the routes over which the material will be transported; and (5) provide an operator point of contact. If notification is not made to a SERC within 30 days of the date of the Order, the railroad is prohibited from transporting such volumes of Bakken crude until notification is provided.

In conjunction with the DOT Emergency Order, the FRA and PHMSA have issued a joint Safety Advisory, strongly urging those shipping or offering Bakken crude oil to use tank cars designed with the highest level of integrity available in their fleets. PHMSA and FRA advised offerors and carriers to the extent possible to avoid the use of older legacy DOT Specification 111 or CTC 111 tank cars for the shipment of Bakken crude oil.

The Order and Safety Advisory are the latest in a series of actions by DOT in response to its determination that a pattern of recent releases and fires involving crude oil rail shipments constitutes an imminent hazard to the safe transportation of hazardous materials. See prior pipelinelaw alerts.

Continue Reading]]>In response to concerns raised by shippers, on March 6, 2014, DOT amended its recent Emergency Order (see prior pipelinelaw alert) imposing certain testing and classification requirements on all persons who offer crude for transport by rail in the U.S. The Amended Order clarifies the scope and frequency of the testing requirements, including that (1) tests should be of ‘sufficiently representative samples’ to determine the crude oil’s flash point and boiling point prior to shipment; (2) existing test data may be relied upon if there is a “reasonable degree of certainty” that it is representative of the product; and (3) tests should occur with “sufficient frequency” to ensure data remains accurate and current. Establishment of testing intervals should account for variability of the material, including the time, temperature, and location of extraction.

DOT’s issuance of this Amended Order demonstrates the evolving regulation of transportation of oil by rail, as PHMSA and FRA continue their “Operation Classification” initiative to review shipments of Bakken crude and consider new rules regarding rail hazmat safety and tank car design.

]]>DOT Emergency Order Affects Crude Shipments by Railhttps://www.pipelinelaw.com/2014/03/06/dot-emergency-order-affects-crude-shipments-rail/
Thu, 06 Mar 2014 15:53:25 +0000http://www.pipelinelaw.com/?p=1133In response to a string of recent accidents and subsequent investigations regarding the shipment of crude oil by rail, DOT issued an Emergency Order on February 25, 2014, requiring that crude shipped by rail be tested and properly classified prior to shipment.

Continue Reading]]>In response to a string of recent accidents and subsequent investigations regarding the shipment of crude oil by rail, DOT issued an Emergency Order on February 25, 2014, requiring that crude shipped by rail be tested and properly classified prior to shipment. The Order makes a finding that unsafe practices by rail shippers are causing an “imminent hazard” to public health and safety and the environment. It applies to all persons who offer crude for transport by rail in commerce within the United States.

This action is the latest in a series of Emergency Orders, Safety Advisories and proposed rulemakings issued by DOT since August 2013 regarding safe transport of oil by rail.(See prior pipelinelaw alerts dated 8/2/13, 9/10/13, and 1/10/14). This latest Order requires that crude be properly tested and classified in accordance with federal hazmat regulations at 49 C.F.R. Parts 172 and 173. In addition, the Order no longer permits the use of the lower risk designation Packing Group III for crude shipments and requires that all shipments be designated as Packing Group I or II hazardous material (the most volatile), thereby requiring the use of a more robust tank car for such shipments. In a press release announcing the Order, DOT Secretary Anthony Foxx stated that “if you intend to move crude oil by rail, then you must test and classify the material appropriately, and when you do ship it, you must follow the requirements for the two strongest safety packing groups.”

]]>Increasing Requests for Disclosure of Documents Under FOIAhttps://www.pipelinelaw.com/2013/08/09/increasing-requests-for-disclosure-of-documents-under-foia/
Fri, 09 Aug 2013 22:56:11 +0000http://pipelinelaw.huntonwilliamsblogs.com/?p=650In light of recent high profile pipeline incidents, PHMSA, among other federal agencies, is experiencing an unprecedented number of requests for disclosure of information under the Freedom of Information Act (FOIA) at 5 U.S.C. 552, et seq. These requests often come from Congress, citizen groups, or other administrative agencies such as the NTSB. FOIA, referred...

Continue Reading]]>In light of recent high profile pipeline incidents, PHMSA, among other federal agencies, is experiencing an unprecedented number of requests for disclosure of information under the Freedom of Information Act (FOIA) at 5 U.S.C. 552, et seq. These requests often come from Congress, citizen groups, or other administrative agencies such as the NTSB. FOIA, referred to as the public “right to know” statute, provides that any person has the right to obtain access to federal agency records, except to the extent that portions of those records are protected from public disclosure by one of 9 exemptions. Most federal agencies have their own FOIA regulations. For example, the Department of Transportation includes the FOIA statutory exemptions at 49 C.F.R. Part 7.13 and provides that the Agency’s policy is to make records available to the public to the greatest extent possible, including “providing reasonably segregable information from documents that contain information that may be withheld.”

Several FOIA exemptions have practical application to materials that pipeline operators submit to PHMSA and other federal agencies in various contexts whether it be construction and permitting, inspection and enforcement, or incident response and investigation. These exemptions include: (1) trade secrets and commercial or financial information obtained from a person that is privileged or confidential (FOIA Exemption 4); (2) personnel and medical files and similar files the disclosure of which would constitute an unwarranted invasion of personal privacy (FOIA Exemption 6), and (3) information that is part of an ongoing enforcement proceeding (FOIA Exemption 7). Further, pipelines represent an important part of the critical energy infrastructure in the United States for which Congress and the Department of Homeland Security have taken steps to limit the public disclosure of certain information that has national security implications (FOIA Exemption 3 and related statutory and regulatory directives).

In submitting documents to a federal agency, whether they are required or submitted voluntarily, operators should consider proactively marking documents that are potentially confidential under FOIA exemptions or that may contain sensitive security information as “Confidential Protected from Public Disclosure.” If the documents are subject to a FOIA request, this requires the federal agency to consult with the operator prior to making the decision whether to disclose the documents. In order to maintain control over redactions to the documents that are submitted to a federal agency, it may also be beneficial to submit proposed redactions of any qualifying confidential information prior to submitting the documents to the federal agency. Many federal agencies have regulations regarding redacting documents that should be considered when making redactions. See e.g., 49 C.F.R. Part 190.209(d) (requiring an operator who seeks confidential treatment for any portion of documents submitted in response to an enforcement action to provide a second copy of the document that includes redactions of confidential information and an explanation for each redaction).

]]>President Obama Nominates Former Hunton & Williams Attorney as Secretary of Transportationhttps://www.pipelinelaw.com/2013/04/29/president-obama-nominates-former-hw-attorney-as-secretary-of-transportation/
Mon, 29 Apr 2013 19:32:55 +0000http://pipelinelaw.huntonwilliamsblogs.com/?p=146The White House announced Monday that President Obama has nominated Anthony Foxx (42) as Secretary of Transportation to replace Ray LaHood, who announced his departure in January. Foxx was elected mayor of Charlotte in 2009, after serving as a city councilman for four years. A graduate of NYU law school, Mr. Foxx practiced with Hunton...

Continue Reading]]>The White House announced Monday that President Obama has nominated Anthony Foxx (42) as Secretary of Transportation to replace Ray LaHood, who announced his departure in January. Foxx was elected mayor of Charlotte in 2009, after serving as a city councilman for four years. A graduate of NYU law school, Mr. Foxx practiced with Hunton & Williams as a business litigator in its Charlotte office from 2001-2009. Foxx’s nomination will now move to the Senate for confirmation hearings.

Continue Reading]]>Transportation Secretary Ray LaHood, the only Republican in Obama’s cabinet announced that he plans to leave the administration as soon as a successor is confirmed. The list of possible replacements includes Los Angeles Mayor Antonio Villaraigosa, NTSB chairman Deborah Hersman, and former Representative Jim Oberstar of Minnesota.